Wednesday 18 July 2012 11.24 EDT
First published on Wednesday 18 July 2012 11.24 EDT

The millions of dollars being spent by Microsoft marketing its Windows Phone platform will have barely any effect on sales in the US, with the total number of handsets running its software expected to rise to 5m of the 123m smartphones sold there this year, according to new estimates from the research company Strategy Analytics.

Instead Google's Android software and Apple's iPhone will continue to dominate, with Android making up more than half of sales, and Apple growing its share from the 29% it achieved in 2011.

Windows Phone sales will grow from about 3.5% of the US market in 2011 to 4.1% in 2012 - equivalent to growth from 3.5m units sold of 100m, to 5m of 123m, says Neil Mawston, executive director of Strategy Analytics. But he warns that the high licence costs of Microsoft's software are holding back its wider adoption by handset vendors – while carriers' concentration on Apple's iPhone, which they subsidise heavily in the hope of attracting premium customers, is cementing that company's position in the market.

Meanwhile, BlackBerry maker RIM is expected to see its share continue to fall year on year. Mawston declined to give specific figures for the shares forecast for Android, iPhone or RIM devices, but the growth in both Windows Phone and iPhone sales can only mean a continuing drop in RIM's share of the market with its BlackBerry product.

Mawston says that Nokia, HTC and Samsung will drive the growth in Windows Phone sales – principally through Nokia's efforts with its Lumia range.

But the gulf in sales between Windows Phone and the other platforms, where Android is expected to make up more than half of all smartphone sales, points to huge challenges for both Microsoft and Nokia.

Microsoft put an estimated $400m into its initial launch for Windows Phone in October 2010, and has committed to a billion-dollar subsidy for Nokia.

However, the forecast suggests that the mobile software – released on multiple vendors' handsets in October 2010 – has still not acquired traction among consumers or businesses, despite the efforts of AT&T to promote sales through its stores. By combining data from ComScore and Nielsen, which take consumer polls of users, Horace Dediu of Asymco calculated that Nokia sold 330,000 Lumia devices running Windows Phone up to the end of May. That contrasts with tens of millions of Android handsets and iPhones.

Mawston said: "breaking the stranglehold of leaders Android and Apple will not be easy. To grow further, we believe future versions of Microsoft's Windows Phone 8 platform will need to dramatically improve support for advanced technologies like multi-core chipsets, enhance the Marketplace app store, expand the number of phone models available from major partners like Nokia or Samsung, and consider reducing the licence fees it charges per unit to smartphone makers."

Windows Phone is on "a knife edge" for its long-term chances because of the licence fee, he said.

The main Android competitors in the US are Samsung, Motorola and LG, Mawston told the Guardian, with a "long tail" of products from HTC, Huawei and ZTE.

He noted that for Microsoft, "adding a few million units to the installed base doesn't make a huge dent in the market position. They are going to have to start competing in the double-digit market share space at the very least."

Mawston said that RIM, whose BlackBerry product has begun to look embattled in the US, with its market share of sales and installed base of users both shrinking year-on-year according to ComScore and Nielsen, "really has got one final chance" with its new BlackBerry 10 platform next year. "If that looks good, then it stands a reasonable chance of stabilising."

Android market share is expected to stay flat because "Apple is consuming the biggest chunk of operators' subsidies," Mawston said. "They're over-subsidising the iPhone at the expense of other handset makers, which is hurting companies such as LG and Motorola." Carriers do that, he said, because "there's a perception that Apple attracts more premium users which leads to premium ARPUs [average revenues per user]. Whether that really works out is debatable."